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As contract manufacturers and fine-chemical suppliers gather for CPhI/ICSE, effective strategies for technology differentiation are key in an increasingly competitive environment.
Building a technology position is crucial for competitive advantage in the market for contract API manufacturing. The author examines recent investment activity in small-molecule and biologics manufacturing.
As contract manufacturers, fine-chemical companies, and technology providers gather for CPhI/ICSE, the large trade show of pharmaceutical ingredients, in Frankfurt next month, a basic, but important question is how the market for contract API manufacturing and related services is performing. One barometer is investment by outsourcing providers. Within the small-molecule sector, although some companies are proceeding with general capacity additions, most are focusing on investment in specialized technologies, such as high-potency manufacturing and chemocatalysis and biocatalysis. An active area of investment is biologics, where several companies have recently made acquisitions or are investing to enhance their capabilities.
Building strength in technologies and capacity
Lonza, a provider of contract small-molecule and biopharmaceutical manufacturing, is investing CHF 10 million ($12.6 million) to expand its biopharmaceutical development services platform in Singapore. The expansion includes the addition of 1858 m2 of laboratory space and associated equipment and will support cell-line construction, upstream and downstream process development, and analytical services. The facility is expected to be on line in the first half of 2012. The facility will complement the company's new mammalian cell-culture plant in Singapore.
At its biopharmaceutical facility in Slough, United Kingdom, Lonza is investing £16 million ($26.1 million) to build a new 60,000-ft2 building to house fermentation and purification suites, process-development laboratories, and a GMP warehouse. The project is expected to be completed by the end of 2012. The Slough site manufactures antibodies and therapeutic proteins.
Lonza also is expanding its viral-manufacturing business. The company is constructing a new cleanroom to support late-stage viral-vaccine and gene-therapy projects at its facility in Houston. The expansion will support production and fill–finish operations for volumes as large as 2000 L. Construction and validation of the facility are expected to be completed by early 2012.
Lonza also is investing CHF 24 million ($30.2 million) to expand cytotoxic manufacturing capabilities at its fine-chemicals facilities in Visp, Switzerland. The company operates high-potency GMP laboratory suites on a gram scale. The investment will add multikilogram-scale cytotoxic capacity for clinical and commercial production. The expansion, which will include fermentation and chemical capabilities, is expected to be completed in the second quarter of 2012.
SAFC completed an expansion of its high-potency fermentation facility in Jerusalem in 2010. The 50,000-ft2 cGMP expansion is focused on niche fermentation of APIs and bulk drugs, secondary metabolites, cytotoxins, and large-molecule proteins. A 30,000-ft2 area of the new facility was designed to comply with Biosafety Level 2 levels, which allows for the manipulation of human pathogens. Capabilities include 1000- and 4000-L tank capacities for bacterial and fungal fermentation. The facility uses E. coli, Streptomyces sp., filamentous fungi, and yeast, including risk Group 2 human pathogens. The facility produces small molecules, peptides, proteins, lipids, carbohydrates, and other macromolecules.
In June 2011, SAFC formed a nonexclusive strategic partnership with the protein-production company Pfēnex under which Pfēnex will manage production strains and processes for SAFC's contract-manufacturing customers. The developed processes will be transferred to SAFC's recently expanded fermentation facility in Jerusalem for cGMP production. The Pfēnex Expression Technology platform is based on the microorganism Pseudomonas fluorescens for producing research proteins, reagent proteins, biosimilars, and innovator biopharmaceuticals. SAFC and Pfēnex also plan to combine Pfēnex's reagent proteins product offerings in vaccine components with SAFC's expertise and facilities for bioconjugation to support the development of conjugate vaccines.
In February 2011, Pfēnex granted Boehringer Ingelheim nonexclusive access to the Pfēnex Expression Technology. Under the multiyear agreement, Pfēnex will engineer production strains and processes for Boehringer Ingelheim's proprietary molecules and molecules from Boehringer Ingelheim's contract-manufacturing customers.
In August 2011, ProBioGen and Boehringer Ingelheim signed a nonexclusive licensing agreement regarding ProBioGen's GlymaxX technology, which is used in the production of afucosylated proteins. Boehringer Ingelheim's contract-manufacturing business will apply the technology to enhance the antibody-dependent cell-mediated cytotoxicity (ADCC) activity of antibodies. Both parties agreed to jointly market the technology and to offer it to customers royalty free. The GlymaxX technology prevents the addition of the sugar fucose to N-linked antibody carbohydrates. The absence of fucose enhances the ADCC. The GlymaxX technology is based on the introduction of a gene for an enzyme that deflects the cellular pathway of fucose biosynthesis.
BioVectra recently expanded its cGMP contract microbial fermentation services at its facility in Charlottetown, Prince Edward Island, Canada. The new manufacturing suite is for the clinical production of fermentation-based APIs and doubles the company's capacity to handle clinical-stage projects to 1500-L scale and related downstream-processing services.
Earlier this year, Neuland Laboratories launched expanded commercial-scale peptide-production services. The company produces peptides using standard sequential chemical peptide syntheses and segment-condensation strategies. The company uses solid-phase peptide synthesis procedures as well as solution-phase methods for shorter length peptides and segment condensation and ligation techniques for long peptides.
Several companies are expanding their capabilities in small-molecule manufacturing. In April 2011, the custom-manufacturing arm of Dr. Reddy's Laboratories expanded its Chirotech Technology Center at Cambridge Science Park, United Kingdom. The new 33,000-ft2 facility will double the scientific staff and allow for further capacity additions, including capabilities in biocatalysis, chemocatalysis, and other fine-chemical activities.
In January 2011, Aesica Pharmaceuticals completed its acquisition of three manufacturing sites in Germany and Italy from the biopharmaceutical company UCB. Aesica acquired the German sites in Monheim and Zwickau, as well as UCB's Pianezza, Italy site. The companies also formed a long-term supply agreement. Aesica also recently invested in a new high-containment facility in Queenborough, United Kingdom.
In February 2011, Saltigo reported on its work in catalyzed coupling reactions, including Buchwald–Hartwig aminations. Buchwald–Hartwig aminations entail the synthesis of carbon–nitrogen bonds through the palladium-catalyzed cross-couplings of amines with aryl halides. The company is involved with the industrial manufacture of special phosphine ligands. At its site in Redmond, Washington, the company recently scaled up the synthesis for Buchwald–Hartwig ligands, biphenyl monophosphines, such as tert-butyl-XPhos, tetramethyl-t-butyl-XPhos, and BrettPhos, for quantities needed for custom synthesis.
"It is usually relatively easy to scale up these kinds of amination reactions once the reaction has reached industrial scale," explained Björn Schlummer, chemicals process manager in Saltigo's pharmaceutical business line, in a Feb. 3, 2011, company press release. The company demonstrated that highly substituted anilines and aryl halides can be coupled efficiently, as demonstrated by the example of a diarylamine that was recently produced in a volume of 630 L.
Almac is investing $4 million in biocatalysis R&D. Research areas include new biocatalytic platforms for producing chiral intermediates, hyperactivation of biocatalysts for reducing enzyme loadings, developing drivers for cofactor recycling, and mitigating problems with equilibriums. Almac provides API manufacturing, formulation development, clinical-trial materials, and commercial manufacturing. In May 2011, Almac opened a new $120-million, 240,000-ft2 North American headquarters in Souderton, Pennsylvania. The new facility offers integrated clinical packaging, drug-supply management, and technology services. The facility has analytical laboratories that complement existing facilities in Craigavon, United Kingdom. The company also added in 2010 a dedicated late-stage customization site to its commercial facilities to assist in orphan-drug and niche-product launches in Europe.
Evonik recently reorganized its fine-chemicals and custom-manufacturing activities. The company combined its custom-manufacturing business (i.e., exclusive synthesis) with its businesses for pharmaceutical amino acids (i.e., its Rexim product line), and pharmaceutical polymers in a new healthcare business, effective Sept. 1, 2011. In June 2011, Evonik increased its production capacity for the pharmaceutical amino acid glycine by 50% at its facility in Nanning, China. The company also acquired the glycine business of the Tessenderlo Group in 2010.
A changing landscape
As companies enhance their technology positions and invest, others are restructuring, and some are emerging as new players in contract biologics manufacturing. In March 2011, International Chemical Investors Group acquired the pharmaceutical intermediates business of Genzyme and integrated it into its pharmaceutical subsidiary Corden Pharma as Corden Pharma Switzerland. Corden Pharma Switzerland is a supplier of lipids, peptides, carbohydrates, amino acid derivatives, pseudoprolines, and small molecules.
In April 2011, Fujifilm Diosynth Biotechnologies, a provider of contract biologics development and manufacturing services, began operations following the completion of its acquisition of the Merck Biomanufacturing Network. The acquisition included facilities in Billingham, United Kingdom, and Research Triangle Park, North Carolina. In June 2011, Fujifilm Diosynth Biotechnologies and Mitsubishi formed a partnership for contract biopharmaceutical manufacturing under which Mitsubishi took a 20% equity stake in Fujifilm Diosynth Biotechnologies.
In June 2011, Fujifilm Diosynth Biotechnologies expanded its mammalian cell-culture capacity by adding a 1000-L single-use bioreactor from the biomanufacturing company Xcellerex to its Research Triangle Park, North Carolina, plant. The expansion is slated to be validated and operational by the first quarter of 2012. The project is the continuation of a cell-culture capacity expansion by Fujifilm Diosynth Biotechnologies.
In February 2011, the materials manufacturer Nitto Denko acquired Avecia Biotechnology, a provider of therapeutic nucleic-acid manufacturing and development services. Avecia provides cGMP manufacturing services, development of analytical methods, process validation, stability studies, quality control, and regulatory support.
Nitto Denko is positioned in nucleic-acid drug technology with its wholly owned subsidiary Nitto Denko Technical, which is based in Oceanside, California.
In May 2011, the private-equity firm Ridgemont Equity Partners acquired a majority stake in Gallus Biopharmaceuticals, a contract biologics manufacturer based in St. Louis. The investment by Ridgemont allows Gallus to acquire a biologics manufacturing facility in Berkeley, Missouri, from Centocor Biologics, a part of Johnson & Johnson. The plant manufactures two Centocor products, Remicade (infliximab) and Stelara (ustekinumab). Ridgemont's investment also will expand the facility's manufacturing capabilities, including by building a clinical-services suite and expanding the existing development laboratory. Gallus plans to make an initial capital investment of $20 million to expand the facility, according to a May 18, 2011, press release by the governor's office in Missouri. Also, in May, Gallus formed a collaboration with the biomanufacturing equipment provider Xcellerex under which Gallus will acquire several Xcellerex bioproduction systems.
Granules India, a vertically integrated pharmaceutical manufacturer, and Ajinomoto OmniChem, a producer of fine chemicals, recently formed a joint venture to offer APIs and intermediates. The new company, Granules–OmniChem is equally owned by both companies and will operate a new production facility in Vishakhapatnam, Andhra Pradesh, India. Construction of the facility will begin by November 2011 and is expected to be completed by late 2012. The facility will begin production by January 2013. The company will initially focus on high-value, low-volume APIs and intermediates for existing customers and will custom manufacture new chemical entities in the future.
In August 2011, CABB, a provider of chemical building blocks, fine and specialty chemicals, and custom-manufacturing services, completed the acquisition of the fine-chemicals company KemFine Group Oy. CABB is a supplier of chemical building blocks based on chlorine and acetic acid. In 2010, CABB employed 750 people and had revenue of EUR 311 million ($447 million). KemFine Group Oy, headquartered in Helsinki, operated a production facility in Kokkola, Finland with approximately 190 employees. It had 2010 sales of EUR 81 million ($116 million).
Carbogen Amcis announced a restructuring in February 2011 for its Swiss operations in Bubendorf, Aarau, and Hunzenschwil. The Aarau site will focus more strongly on development, and the Hunzenschwil site on the pilot production of early-phase projects. Large-volume production and the manufacturing of highly active agents will continue at the Bubendorf site. The restructuring involves a headcount reduction of 60 employees.